STRATO · Free tools
Impermanent Loss Calculator
Estimate the impermanent loss on a 50/50 liquidity position. Enter how each asset's price moved since you deposited and see your loss versus simply holding the two tokens.
Excludes trading fees and token incentives, which offset impermanent loss. If prices return to their deposit levels the loss disappears.
What is impermanent loss?
Impermanent loss is the gap between the value of tokens held inside an automated market maker (AMM) liquidity pool and the value of those same tokens if you had just held them in your wallet. It happens because the pool automatically rebalances as prices move — selling the outperforming asset and buying the underperforming one to keep the pool's value ratio constant.
The loss is called “impermanent” because it only becomes realised when you withdraw. If the relative prices of the two assets return to where they were when you deposited, the loss disappears. In practice, trading fees earned by the pool can offset some or all of the impermanent loss, which is why the fee APR matters just as much as the price path.
How impermanent loss is calculated
For a standard constant-product (x·y=k) 50/50 pool, impermanent loss depends only on the ratio of the two assets' price changes. If d is the new price ratio divided by the price ratio at deposit, then IL = 2·√d / (1 + d) − 1.
As a quick reference: a 1.25x relative price move produces roughly 0.6% loss, a 1.5x move about 2.0%, a 2x move about 5.7%, a 3x move about 13.4%, a 4x move about 20.0%, and a 5x move about 25.5%. The loss is symmetric — a token halving costs the same as a token doubling.
Frequently asked questions
Is impermanent loss a real loss?
It is an opportunity cost that only becomes a realised loss when you withdraw your liquidity. While your funds remain in the pool the loss is unrealised, and it shrinks to zero if the two assets' relative prices return to their level at the time of deposit.
How can I reduce impermanent loss?
Provide liquidity for correlated or pegged pairs (such as two stablecoins or a stablecoin and a like-pegged asset), choose pools with high trading-fee income relative to volatility, or use single-asset and actively managed strategies that hedge exposure. Wider price moves between the two assets always increase impermanent loss.
Does earning trading fees cancel out impermanent loss?
Often, yes. Liquidity providers earn a share of every swap's fee. If the fees collected over your time in the pool exceed the impermanent loss, your net position still beats holding. This is why high-volume pools can remain profitable even when prices diverge.
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